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Theory of consumer behaviour — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsTheory of consumer behaviour2 Marks
Question
Due to a 10 per cent fall in the price of a commodity, its quantity demanded rises from 400 units to 450 units. Calculate its price elasticity of demand.
✓

Answer

$\text{e}_\text{D}=\frac{\%\ \text{change in quantity demanded}}{\%\ \text{change in price}}$

$=\frac{\frac{50}{400}\times100}{-10\%}=\frac{-12.5}{10}$

$=-1.25$

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